California and the West

Lawmakers Contending With Power Crisis Have Holdings in Electric Firms

SACRAMENTO — More than a dozen of the 120 state lawmakers meeting in special session here to deal with California's power crisis report stock holdings or business relationships with utilities or electricity suppliers, according to interviews and financial disclosure statements.

Several of the reported holdings are significant, although most are relatively modest.

Newly elected Assemblywoman Carol Liu (D-La Canada Flintridge), whose husband is the retired president of Southern California Edison, reported stock ownership totaling more than $10,000 in three important electricity suppliers: AES, Enron and Unisource.

Liu, former La Canada Flintridge mayor and City Council member, said she and her husband, Michael Peevey, sold their much larger combined stock holdings of more than $200,000 in utility giants Pacific Gas & Electric and Edison International last year.

Liu said her holdings will not affect her objectivity in assessing causes of or solutions to California's electricity crunch and runaway wholesale prices.

"I don't think it will affect my decision one way or another," said Liu, one of the wealthier Assembly members. "In fact, if we find out that some of these generators have been gouging Californians, as far as I am concerned the attorney general ought to go after them."

Another wealthy Assembly newcomer, Rebecca Cohn (D-Saratoga), reported five energy stocks, all foreign investments, in a portfolio of more than 150 stocks listed in her husband's family trust. Cohn said the energy investments total $15,000 and that she does not consider them significant.

In his most recent economic interest statement filed with the state, new Assemblyman Phil Wyman (R-Tehachapi) reported stock holdings of more than $1,000 in each of four energy companies including Sempra, the San Diego utility.

Wyman also reported that his political lobby firm, Phil Wyman & Associates, received more than $10,000 from a subsidiary of international energy giant AES. Wyman was unavailable for comment, according to his Sacramento staff.

Sen. Steve Peace (D-El Cajon), who led the Legislature's 1996 drive to deregulate electricity, lists no energy or utility stocks in his holdings. However, his 1999 statement filed in July 2000 listed Sempra Energy, parent company of San Diego Gas & Electric, as a client of his filmmaking company, Four Square Productions.

California law requires legislators and other public officials to disclose assets and income that may be "materially affected by their official actions." It also states that they should sometimes be disqualified from participating in certain decisions to avoid conflicts of interest.

"No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest," reads Gov. Code Section 87100.

In practice, determining whether a public official has a financial interest large enough to represent a conflict of interest is a subjective and prickly proposition. The Fair Political Practices Commission, the agency that administers the state's Watergate-era Political Reform Act and levies fines on violators, is often asked to decide that question, and weighs many factors.

Among them are not only whether the decision will result in a financial windfall for the officeholder, but also whether it will benefit him or her more than it will the public.

Several legislators said in interviews that they had sold stock in the wake of electricity price jumps that broke out last summer in San Diego. Among those selling was Sen. Dede Alpert (D-Coronado), who said she sold her shares of Sempra Energy valued at more than $10,000 when utility rates skyrocketed.

"We sold all of our San Diego stock in July when I first began to deal with this issue," said Alpert, "and I felt it wasn't appropriate to own this stock any longer."

In a telephone interview, Senate President Pro Tem John Burton (D-San Francisco) said he briefly held stock last year in Williams Energy Services, a Tulsa-based electricity and natural gas marketer that sells energy in California.

"I thought it was fiber optics," said Burton, a lawyer who represented PG&E on some hydroelectricity issues in 1993-94, "When I learned it was energy, I sold it immediately."

Some officeholders are more conscientious than others about filling out their economic interest forms. Assemblyman Alan Lowenthal (D-Long Beach) lists a breakdown of his wife's stock portfolio, although he said he is never personally involved in the investments.

The Lowenthal file lists stock investments in Calenergy Co. and AES, totaling more than $10,000. However, because of the long delays before filing, Lowenthal said in a telephone interview, his statement did not include his wife's purchase of 200 shares of Enron, the Houston energy giant, last February. The stock is currently valued at more than $14,000.